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San Jose Divorce Lawyers Blog

Who Claims the Child Tax Credit

One thing many couples do not consider when contemplating a Santa Clara divorce is the tax implications of ending their marriage. However, this is particularly important when you have children with your former spouse. The child tax credit allows you to reduce the amount of your taxable income by up to $1,000 for each child under the age of 17. The child tax credit can offer even more savings if you also qualify for the Earned Income Tax Credit (EITC) given to low income taxpayers.

The IRS considers a parent someone who is related to a child by birth or adoption. The parent claiming the tax credit must be listed on the child’s birth certificate. This is an important factor to consider if you were not married at the time of the child’s birth.

Typically, child tax credits are awarded to the parent who cares for the child the majority of the year. For example, if a child lived at his mother’s house for 265 days and his father’s house for 100 days, the mother would be the parent entitled to have the child tax credit. (When counting days of residency, absences due to camps or sleepovers are added to the total of the parent who would have otherwise been caring for the child.)

If parents have joint custody and spend equal amounts of time caring for their children, the parent with the higher income is presumptively entitled to the child tax credit. For example, if the mother has the child in her care for 183 days and earns $50,000 a year and the father cares for the child 182 days and earns $80,000 a year, the father would be entitled to claim the tax credit.

If you would like to work out an arrangement that differs from the IRS rules, you can have this specified in your divorce degree. For example, some parents choose to take turns claiming their children and any available tax credits. A non-custodial parent may be allowed to claim the child on his or her tax return after submitting Form 8332, titled “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.” A Santa Clara divorce lawyer can provide guidance in regards to this issue.

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